The social economics of UBER

This is not a personal story, but merely a commentary on the impact of ridesharing technology on the economics of the transportation industry. UBER has been good for me as a minimum wage supplement to my minimal retirement income. But for those who make a living delivering people & things, UBER is just one ripple of an onrushing tidal wave of artificial intelligence sweeping away jobs for humans. The AI that makes UBER possible will soon make dumb drivers obsolete.

I just found news articles noting the impact of ridesharing on the livelihood of drivers remaining in the ubiquitous, but obsolete, technology of New York taxis. Apparently the new tech is driving down their standard of living to the point that life is not worth living. The articles report that "four professional drivers killed themselves in the span of five months". In the current income inequality of the 2% vs 98% economy, many traditional jobs are being devalued by cheap overseas labor, and cheap everywhere technology. Even the highly educated teachers of our children are marching in the streets to protest the steady decline in their wages and autonomy. Technology may be only a minor contributor to their wage stagnation, but it tends to increase productivity while decreasing the need for human labor, even mental work.

I suspect that this downward pressure on incomes, making minimum wage jobs the norm, is partly responsible for the animosity & cynicism toward UBER execs and passengers that is evident on this forum. I'm afraid we are on the verge of a new round of unionism, where humans futilely go on strike against the machines and the money men*. Except for temporary relief, such political activity will have little effect on the long-term trend. Economists are aware of the urgency of this labor-value decline in developed countries, but have reached no consensus for what to do about it. I probably won't be around for the worst of this intrinsic recession, but younger drivers should make plans for something else to do when their jobs go the way of the dinosaurs and cab drivers. Meanwhile, take the scenic route.

IMO we will need a basic income provided to everyone regardless of moral failings, with every occupation in which human labor is required involving very few hours per person but still having a livable salary above and beyond the minimum provision. Yes, there is socialism involved. No, I won't be swayed by any arguments about who deserves what, government theft, and that you personally manufactured every resource you use in life and everyone else needs to do the same.

The real muscle in the game is not the folks at the top, but technology and how society embraces the things it offers. Technology will forever force out certain industries while giving birth to others. It is the way we progress as a society. For example, those that lost their jobs in the typewriter industry and chose not to move onto something more viable have no one to blame but themselves. It's not the rich guy's fault that society moved on and no longer want what they were selling. Every one of us is subject to the potential obsolescence of our profession. Those that are not willing to adapt are not "owed" a thing.

I see you live in Alabama. The poverty that existed in this country, especially in the south, 100 years ago was brutal. I disagree that somehow our standard of living is declining in the United States. Goods and services that were once only available to the wealthy are now taken for granted by folks even at the lowest income levels. The factors that force workers to adapt and sometimes even change industries ultimately are the same factors that boost the standard of living for all income levels.

Given a choice, there is no way I would choose to grind out a living 25, 50 or 100 years ago. The opportunities we have now for those that choose to be productive are very good. And it's not just tech people. I own a small business that depends on trade workers. Times have never been better for any one of them that is a solid worker, and when they do well, so do I. Just as I like it.

I disagree that somehow our standard of living is declining in the United States.

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The 2% at the top are not intentionally pushing wages down to the point where people working in old tech become depressed enough to commit suicide. They are just doing what ambitious people do, climbing the social & economic ladder. But the capitalist system is built in the shape of a pyramid, with the majority of workers at the very bottom. How else do you think the Egyptian pyramids got built? The problem is that those who fall below a living wage, are crushed by the weight of all those above, and become homeless or just end it all. Some hard-nosed economists might say "good riddance".

Back in ancient Egypt, technology advanced on a time-scale of millennia. But today, the rate of change is counted in single lifetimes. So those born today may have to "adapt" to technological turn-over every 20 years. Some will be able to keep-up with the rapid pace, but what should we do about those unfit "failures" who fall out of the system? Do we owe them anything for simply being fellow humans? Or do we just shovel them into mass graves with no concern for dignity? This will get to be a bigger issue as time goes by. As Jesus said, "the poor ye have with you always". And Barack Obama's response to the "not owed a thing" attitude was "But part of that belief comes from my faith in the idea that I am my brother's keeper and I am my sister's keeper; that as a country, we rise and fall together. I'm not an island."

In general, the standard of living in the US is the envy of millions around the world. But in the Black Belt of Alabama, people are living in third world conditions; 50% are unemployed, and surviving on "socialist" government welfare. Maybe they should do like ambitious hard-working Mexicans, and illegally immigrate to the US. Oh wait, they're already here! Maybe we should build a wall around those "lazy" counties, and let them adapt or die???

The situation in your local business may be peachy, but overall, the wages of "trade workers" are stuck in a rut (see article below) If you want an objective look at the big picture, check-out the "wage stagnation" chart in my first post. Part of the economic slow-down in developed economies is due to the fact that third world countries are finally making the kind of rapid progress that the US did after WWII. They are getting a bigger slice of the pie, and the US is losing some of its sweet filling to those "uppity" foreigners, who are willing to work. and to adapt. Now our fat & sassy workers are being forced to compete with lean & hungry Chinese. It's a different economic playing field, and our human capital may lose a few players to the concussion of sudden job loss.

My concern here is not with economic abstractions, but with warm-blooded humanity. I'm confident that, as a nation, we'll find a way to overcome the downsizing of the world's largest economy (projected number 2 in 2030, see below). But as we struggle to teach the teeming masses how to adapt their cave-man brains to a high-tech rat race, more ignorant but innocent lives will be lost. As Donald Trump might say in a tweet, "sad"!

The real muscle in the game is not the folks at the top, but technology and how society embraces the things it offers. Technology will forever force out certain industries while giving birth to others. It is the way we progress as a society. For example, those that lost their jobs in the typewriter industry and chose not to move onto something more viable have no one to blame but themselves. It's not the rich guy's fault that society moved on and no longer want what they were selling. Every one of us is subject to the potential obsolescence of our profession. Those that are not willing to adapt are not "owed" a thing.

I see you live in Alabama. The poverty that existed in this country, especially in the south, 100 years ago was brutal. I disagree that somehow our standard of living is declining in the United States. Goods and services that were once only available to the wealthy are now taken for granted by folks even at the lowest income levels. The factors that force workers to adapt and sometimes even change industries ultimately are the same factors that boost the standard of living for all income levels.

Given a choice, there is no way I would choose to grind out a living 25, 50 or 100 years ago. The opportunities we have now for those that choose to be productive are very good. And it's not just tech people. I own a small business that depends on trade workers. Times have never been better for any one of them that is a solid worker, and when they do well, so do I. Just as I like it.

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Are you hiring?

I can't believe a debate this well thought out, organized, rebuttaled, and polite is happening on the uberpeople.net forum. You guys must be uber black drivers.

I am doing a plaster cieling tonight because the guy I call for plaster work is so busy with his own stuff he apologeticly said he can't be out for at least a week.

Funny thing is he used to be a tech for ATM"s. He thought he was set for life 15 years ago.. Now no one uses cash and when they do, cash back at the gas station or grocery store has no service fee... Which killed the need for so many ATM"s. Can"t get much lower tech than a mudder that specializes in plaster repair. But he wotks his a** off and has become really good at it.

Do we owe them anything for simply being fellow humans? Or do we just shovel them into mass graves with no concern for dignity?

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Lol. Mass graves seems a bit extreme. I just said I don't feel I owe my productivity to folks that choos to be idle.

Being poor is no more of a virtue than being rich. I think we can all agree that the rich are not owed anything from thier felliw man. Then why would we conclude that a poor guy is entitled to other people's money simply because he's human too?

Don"t get me wrong, being charitable is a possitive thing. But giving poeple money just because they are poor makes no sense. Will that make them middle class somehow? Only if they are willing to work for it..

The situation in your local business may be peachy, but overall, the wages of "trade workers" are stuck in a rut (see

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Disagree completly. That is a 1994 article, by Paul Krugman. I don"t know the trade environment back them but I know it very well now. Today, an unskilled person, willing to work hard to learn a trade can do as well as many white collar workers. Paul is also far from objectivevabout this topic.

Lol. Mass graves seems a bit extreme. I just said I don't feel I owe my productivity to folks that choos to be idle.

Being poor is no more of a virtue than being rich. I think we can all agree that the rich are not owed anything from thier felliw man. Then why would we conclude that a poor guy is entitled to other people's money simply because he's human too?

Don"t get me wrong, being charitable is a possitive thing. But giving poeple money just because they are poor makes no sense. Will that make them middle class somehow? Only if they are willing to work for it..

Disagree completly. That is a 1994 article, by Paul Krugman. I don"t know the trade environment back them but I know it very well now. Today, an unskilled person, willing to work hard to learn a trade can do as well as many white collar workers. Paul is also far from objectivevabout this topic.

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Being poor is not a virtue, being rich is. This assumes wealth was morally acquired. Too many folks assume the rich just get that way somehow, whether its inheritance or some other magical way. More or less, the only way to get rich is to build a company - which takes smarts and hard work. If becoming rich were so easy, why doesn't everyone just go do it? Because they can't they don't have the drive or the skills, or the idea, or the ability to raise capital, or an understanding of system, etc.

Getting oneself rich usually means you got a lot of others rich alongside you and provided many with suitable employment along the way. That virtuous if you ask me.

I just said I don't feel I owe my productivity to folks that choos to be idle.

. But giving poeple money just because they are poor makes no sense.

Disagree completly. That is a 1994 article, by Paul Krugman. I don"t know the trade environment back them but I know it very well now. Today, an unskilled person, willing to work hard to learn a trade can do as well as many white collar workers. Paul is also far from objectivevabout this topic.

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I don't want to get into a Liberal versus Conservative argument, because such debates just talk past each other, and go in circles. But the "choose to be poor" rationale is based on an obsolete understanding of human nature.

Nobody is suggesting that a nation give money to people "just because they are poor". The American people survived the Great Depression -- that was not caused by lazy people at the bottom, but by ambitious people at the top -- by re-distributing money to those in need, not because they were poor, but because they were our neighbors, and were suffering. Likewise, the Great Recession of 2008 was not caused by the expendable pawns, but by the kings of Wall Street, who were too big to fail. They were given public money, just because they were rich.

If Krugman's article is out of date, or you just don't like his politics, try Googling "wage stagnation" to get page after page of articles right up to this very day. Today, people who are willing to work hard, are lined-up at employment offices, with one job for every three applicants.

All of that is beside the point of this thread, though. We were talking about UBER drivers, who are entering a currently expanding job market, and Taxi drivers who are losing jobs with decent wages & benefits, to those willing to work for minimum wage, with no benefits. In most markets, UBER drivers average about the same hourly rate as pizza drivers, including tips. The only advantage is that Ubies can work 12 hours a day, and 7 days a week, if they are "willing to work hard". Meanwhile the cost of getting by is going up, but the minimum wage is stagnant.

This is not a problem for me, since I have opted out of the rat race. Except it wasn't by choice; I was retired by the Great Recession, from self-employment as a highly educated professional. And the only job I could find in 2010 was delivering pizzas. I was willing to work, but it was a big drop in income. So, I can sympathize with those depressed taxi drivers, who suffered not only a loss of jobs, but of self-esteem. Nevertheless, "Where there's a will, there's a way". "While there's life, there's hope".

All of that is beside the point of this thread, though. We were talking about UBER drivers, who are entering a currently expanding job market, and Taxi drivers who are losing jobs with decent wages & benefits, to those willing to work for minimum wage, with no benefits. In most markets, UBER drivers average about the same hourly rate as pizza drivers, including tips.

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Doesn't this tell us Taxi drivers were making too much for the value they provided due to rent-seeking brought about by regulating the number of badges?

Once the free market was able to work, it settled on a number that provides the right income/value ratio, which happens to be the equivalent of what a pizza delivery person makes. Why would be any different? They essentially do the same job.

Doesn't this tell us Taxi drivers were making too much for the value they provided due to rent-seeking brought about by regulating the number of badges?

Once the free market was able to work, it settled on a number that provides the right income/value ratio, which happens to be the equivalent of what a pizza delivery person makes. Why would be any different? They essentially do the same job.

I didn't intend to get into the morality of economics debate. It's not called the "dismal science" for nothing. But, I'll just point out that the invisible hand of God (er, Free Market) is only one side of the equation. The other side is the visible hands of humanity that make up that market. They are both buyers and sellers. As Henry Ford demonstrated, if you pay your workers a living wage, they can buy the products they make with their own hands.

The abstract statistical Market is envisioned by some as a Social Darwinian jungle, red in tooth and claw, where only the fittest survive. But if we moderate our predatory instincts and our prey instincts with reason, we can emerge from the jungle, and move into modern civilization, where people from all walks of life can live together in a free society.

I've posted an image that illustrates how the masses of prey (98%) manage to survive the superior weapons of their predators (2%). By banding together, and showing a united front. This is how unionism and socialism work. I am neither a unionist, nor a socialist, but I'm also not a heroic Howard Roark. But, as the son of a union man, I can see why the herds of working classes do what they do, when their very survival is at stake.

Note : I'm not smart enough to predict how the US will handle the inevitable wealth redistribution of the Global Market. Rickshaw pullers in India do the same job as UBER drivers for pennies a day. Will the Free Market put us in competition with them?

"Low wages are the most costly any employer can pay. It is like using low-grade material--the waste makes it very expensive in the end. There is no economy in cheap labor or cheap material". ___Henry Ford

"I will build a motor car for the great multitude...constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise...so low in price that no man making a good salary will be unable to own one-and enjoy with his family the blessing of hours of pleasure in God's great open spaces." ___Henry Ford